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Airtel hints at price drops, but no free calls

Market leader Airtel has admitted that space exists for price drops, but is clearly worried about escalating a price war with Jio.

In a clear indication that a calibrated response was all that Airtel was counting on, Gopal Vittal, MD and CEO, India and South Asia has spoken about the possibility of prices 'softening', but ruled out a free call regime in the future to PTI.

Airtel has so far surprised analysts, and perhaps, its million of subscribers, by not making any significant effort to match Jio's introductory rates, perhaps seeing the futility of matching something priced at zero.

More significantly, the response, along with its submission to the telecom regulator about providing more interconnect points than at any time before after Jio's entry, make it clear that the incumbent would rather ride out the free period till Dec 31st, and then buckle down to a formal war of attrition with Jio. So clearly, it does seem to be in the interest of all the incumbents to see Jio's free period end on Dec 31stor earlier, instead of getting extended due to a 'less than optimum' experience, as some Jio executives have spoken about.

To be sure, Airtel has not exactly been sitting tight. While it announced price cuts on data for its prepaid subscribers last month, in the past week or more, it has also quietly rolled out special data packages or top-ups for select postpaid subscribers. Starting at Rs 100 for 2 GB extra data and up proportionately, depending on the data plans and usage, the firm has clearly moved to protect its premium users from Jio's outreach.

As the deadline for Jio's free offers nears, expect more announcements and revisions from the incumbents. The joker in the pack? An extension of the free period by Jio to Jan 31st or beyond, a possibility that is looking increasingly unlikely, except perhaps for select new subscribers to specific plans.

First Published : Thursday, November 03, 2016 - 11:17




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